Case Studies

Canadian Corporate Pension Plan

Investment Strategy: Private Equity

Solution: Advisory

Overview:

A corporate pension plan with experience investing in private equity was seeking an advisor to construct a distressed debt and special situations private equity portfolio to complement its existing investments.

Solution:

Caledon worked with the client to develop an investment strategy, a portfolio pacing plan and an implementation plan to build a portfolio of funds specifically focused on distressed debt and special situations. Over a three-year period, Caledon executed the investment strategy on behalf of its client, at times aggregating fund commitments alongside its other clients to access better fund terms.

US Public Pension Fund

Investment Strategy: Infrastructure

Solution: Advisory and Managed Account

Overview:

The New Mexico Education Retirement System (“NMERB”) was seeking to further develop its infrastructure investment program by growing its existing fund portfolio and complementing it with infrastructure co-investments. NMERB decided to seek a specialized advisor to achieve its goals, ran an RFP process and selected Caledon in 2011.

Solution:

Caledon presented a two-part solution. First, it would work with NMERB on an advisory basis to manage and grow the existing infrastructure fund portfolio. Second, Caledon would create a customized separately managed account to invest in co-investments and minority direct investments. Caledon would also be responsible for monitoring and reporting on all aspects of NMERB’s infrastructure portfolio.

Canadian Public Insurance Board

Investment Strategy: Infrastructure

Solution: Advisory

Overview:

In 2010 an insurance board completed an asset liability study and concluded that an allocation to infrastructure would be beneficial to its long term portfolio goals. The client wished to build an investment program that included infrastructure funds to provide initial portfolio diversification as well as significant exposure to direct infrastructure assets.

Solution:

In conjunction with the client, Caledon developed an investment strategy targeting an infrastructure portfolio that would include 50% funds and 50% co-investments and directs. Caledon is responsible for executing the agreed upon strategy and is also responsible for maintaining and updating the annual pacing plan and the ongoing monitoring and reporting on the portfolio.

Canadian Public Multi-Employer Plan

Investment Strategy: Private Equity

Solution: Advisory

Overview:

A public multi-employer plan decided to build a private equity portfolio to diversify away from traditional asset classes and increase portfolio returns. The goal was to build a well-diversified portfolio of funds supplemented by secondary opportunities and accretive co-investments.

Solution:

In 2009, Caledon was retained to begin building a diversified private equity portfolio focused on buyout funds, growth funds as well as distressed and special opportunity funds, and opportunistically review co-investments and secondary opportunities. Caledon was also tasked with providing monitoring and reporting on the client’s private equity portfolio.

Provincial Public Pension Plans

Investment Strategy: Private Equity and Infrastructure

Solution: Managed Account

Overview:

After conducting an AL study, the Public Service Pension Plan of Newfoundland decided to include a 5% allocation to each of private equity and infrastructure to diversify away from traditional assets classes and increase risk adjusted returns.

Solution:

After a comprehensive RFP process, Caledon was selected to develop and implement both the new private equity and infrastructure programs. In both cases, the investment strategy had a strong emphasis on building a well-diversified fund portfolio complemented by secondaries and an allocation to direct investments and co-investments. Caledon developed the investment strategy, pacing plan and is currently investing the client’s private markets portfolio.